Treasury Holdings-backed China Real Estate Opportunities (Creo) today reported its portfolio was up 4 per cent in CNY (yuan) terms for the six months from June 30, 2009 and up 7 per cent in sterling for the same period.
The AIM-listed Creo’s portfolio was valued at CNY9.19 billion as at 31 December 2009 or £836.9 million, according to the company's 12-month preliminary results. Company cash holdings as of the end of 2009 were just over £80 million.
European public real estate net asset value per share fell by 14 per cent in the 12 months from December 31st, 2008, largely due to currency movements, the company said, but the second half of the year saw a 7 per cent rise in this measure from £10.62 as at June 30th, 2009, to £11.37 at the end of December.
Creo said rental income was stable in local currency "despite lower average occupancy across the portfolio" as it continued to achieve average rental uplifts of up to 5 per cent on a square metre basis.
"Significant progress" was also reported in the company's strategic objectives to refinance investment assets and strengthen its capital position through disposing non-core holdings:
A multi-currency three year loan equivalent to £27.72 million on improved terms was agreed for the refinancing of Treasury Building, and the company completed the sale of its effective 5 per cent minority stake in the City Center 5 Development, for £8.6 million in June 2009.
Between November 2009 and February 2010, Creo also disposed of its holding in RREEF, a Hong-Kong listed Reit for HKD118.28 million (£10.18m based on current exchange rates), a return of 36.9 per cent on its original investment in HKD terms.
The company has also disposed of its 50 per cent stake in the Tangdao Bay Development based on a property value of Rmb1.389 billion representing a 10.9 per cent premium to the most recent independent valuation in June 2009.
Creo reported net cash proceeds from the transaction amount to £35.6 million at today’s exchange rates. Including proceeds from the Tangdao Bay disposal, cash holdings as at 31 December 2009 were just over £80 million.
Commenting on the results, Creo chairman Ray Horney said: “2009 has been an important year as the company successfully applied its asset management expertise to deliver strong results in a competitive market whilst also positioning the company for the future.
"Important milestones were reached such as the refinancing of the Treasury Building and the sale of the non-core stake in Tangdao Bay. The financial position of the company has been considerably strengthened and the board remains confident about the outlook for the company”